Apple planning dramatic retail store expansion ahead of iPhone 5

Apple is capitalizing on its strong retail store sales--and preparing for its upcoming iPhone 5 launch--by erecting 30 new outlets before the third calendar quarter ends in September, including the company's first in Hong Kong.

Apple's chief financial officer Peter Oppenheimer reported in the company's conference call today that retail stores had brought in $3.5 billion in revenues, generating $828 million in profits during the second calendar quarter (Apple's fiscal Q3). Apple set new quarterly sales records of 20.3 million iPhone and 9.2 million iPad units, and hit new peaks for overall revenue and earnings.

On average, the company's retail stores generated $10.8 million each in the quarter, shy of the record holiday quarter set this winter when average store sales hit $12 million. The quarter is typically among Apple's weakest, falling between the holiday rush and back to school sales, and buoyed only by new product introductions. However, this quarter Apple didn't launch a new generation of iPhone, waiting to ship iPhone 5 until September.

A captive, loyal audience

In addition to selling 768,000 Macs during the quarter, Oppenheimer said the stores hosted 73.7 million visitors and handled over two million Personal Setup sessions.

Previously, Apple executives have noted that the audiences reached by the company's retail empire have made annual trade shows like IDC's Macworld Expo irrelevant to the company, while the ability to work directly with customers has helped make the Apple brand sticky among its buyers.

Apple boasts leading loyalty rankings among both PC and smartphone users.

Asia Pacific growth spurs retail expansion

In addition to the new store planned for Hong Kong, Apple's chief operations officer Tim Cook described the greater China market as ripe for retail expansion, noting that the region is "very key," and that Apple was still "just scratching the surface" of that market segment.

Apple has previously said it would open 25 stores in China by then end of next year, hoping to leverage the strong sales occurring in the Asia Pacific market. Compared to the previous quarter, Apple's Asia Pacific sales were up 34 percent, more than twice the company's overall sequential quarterly growth of 16 percent.

Compared to the year ago quarter, Apple's Asia Pacific sales were up an astounding 247 percent, more than three times its overall growth of 82 percent. Regional sales growth in Asia Pacific countries also dwarfed Apple's retail store growth over the past year, suggesting strong potential for new profits once the company builds out its own retail presence in Greater China.